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Here’s how to get consistent cash flow in your business

The number of businesses that fail within the first year or two is high. Massively high. There are many reasons for failure but one of the reasons is that the bills are consistent but the income isn’t. The income rises and falls as the business owner learns how to market, sell, and deliver their offering.

The sooner you can build your business to be consistent, the higher chance you have of beating the odds and surviving to year 3 and beyond.

So how do you get consistent cash flow in your business?

The only way to do it is to build a consistent sales funnel.

A sales funnel is the system in your business that attracts people toward you so they learn more about you and become prospects and then customers. I content that sales funnels are the most important part of your business because they’re the tool you use to get customers and make money. (I wrote an entire book on it called The Sales Funnel Bible #shameless plug)

So, how do you build a sales funnel that runs consistently?

You need clearly defined steps that are systematized (and preferably automated), and you need a way to keep prospective buyers in a holding pattern.

Let’s break that down…

CLEARLY DEFINED STEPS THAT ARE SYSTEMATIZED

Your sales funnel is made up of a series of steps. These steps are defined by the mindsets that your prospective buyers go through as they journey from “I have a problem” to “This company can help me solve my problem.” Along the way they’ll transition through mindsets like “I can live with this problem” to “I wonder if someone can help me” to “There are several companies that can help me solve this problem” and so on.

So, whether your prospective buyer has to transition through just a few steps or many steps, you need to figure out what those steps are (approximately) and then help the prospective buyer to move through them.

Once you’ve figure that out, you can systematize each step to some degree. Automation is one type of systematization but there are other ways you can systematize it — even if it’s just something as simple as writing out templates so you can customize them when a prospective buyer reaches a certain point in your sales funnel.

By systematizing, you attract people into your sales funnel and move them through with as little effort on your part as possible. (It’s a balance — you’ll want to maintain some visibility and control over the process and it might make sense to build a personal relationship with your prospective buyers. But all of this can be managed through some well-thought-out systematization).

KEEP YOUR PROSPECTIVE BUYERS IN A HOLDING PATTERN

This is the more challenging part. For consistent cash flow, you need to find a way to keep your prospective buyers in a holding pattern. By “holding pattern” I mean: you need to find a way to keep them in your sales funnel without necessarily buying from you today.

You do this through ongoing communication that adds value to them, and makes offers, and promises to add value in the future. My favorite way is to use email or print newsletters, although there are other ways to create a holding pattern.

You should do this while they are still in the Lead stage (that is: they’re learning more about your business and weighing their options). In my opinion, the Lead stage is the best stage to put people into a holding pattern because they are still seeking out information, which positions them perfectly to sign up for your newsletter or some other ongoing communication.

(If you wait until they are at the Prospect stage, they are already getting serious about buying and your newsletter will either entice them to buy right away or will push them out of your sales funnel because it seems to push them backward in your funnel).

HERE’S THE BENEFIT OF A CONSISTENT SALES FUNNEL

By building a sales funnel that systematically attracts people in and puts them into a holding pattern, you create a list of people that you can sell to very easily whenever you want to. This will have a huge impact on your business and its cash flow: An inconsistent business realizes that it needs more customers so it goes out to find them, creating an inconsistent cash flow because of the time lag between finding a customer and getting paid; A business with a consistent “holding pattern” sales funnel already has a bunch of prospective buyers in a holding pattern and can just pluck out a few from the holding pattern when more customers are needed.

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Go after your leads BEFORE they become leads: How to convince buyers that they want more than a faster horse

I’ve been writing about sales funnels for a while. And if you’ve ever heard me speak about them, or you’ve read my book The Sales Funnel Bible, you’ll know that one of my favorite sales funnel speaking points is this:

Your sales funnel starts earlier than you think it does.

Unlike how most people view their sales funnel, it doesn’t start with marketing to get leads.

Your sales funnel starts earlier — with your audience.

You should be marketing to them long before they realize they have a problem that you can solve. You should be marketing to your audience to let them know that they have a problem.

A great example here is from Henry Ford. He famously (and apocryphally?) said that if he had asked his customers what they needed, they would have said they needed a faster horse. He needed to find potential car buyers and let them know that they had a problem they didn’t even realize they had!

The same thing is happening in your business. You solve a problem — great! — but there are people who don’t realize that they even have a problem. If you market only to those who already know they have a problem, you miss out on a huge market of people who are only a small decision-point away from discovering they have a problem that you solve.

So build your sales funnel “taller” and “earlier” by educating people who don’t realize they have a problem.

Imagine my delight when I saw that Moz (formerly SEOmoz, whose content I find so damn interesting) wrote about this exact topic on a recent Whiteboard Friday post. That’s validating because Rand Fishkin is smarter and more popular than I am… so maybe I’m kind of on the right track. :)

Check it out here:

Targeting your audience earlier in the buying process

This is such a huge opportunity for business owners. If you’re not paying attention to your audience, start today!

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Prospecting more effectively in four easy steps — co-written with Rosemary Smyth

This article was co-written with my friend, Rosemary Smyth, an international coach to financial advisors. The article is also posted on her website.

The success of many of the top-earning financial advisors hinges on their ability to simply get more clients. Although exceptions to this rule exist, the advisors who outlast their peers and are nearing retirement with a big book of business are usually those who did more prospecting (and more effective prospecting) earlier in their career. They are also more likely to have maintained the practice even when other advisors stopped.

Most advisors follow one of two routes when they go out prospecting. The first route, especially for new advisors, is to go after anyone you know or meet. Everyone gets a business card or three and a follow-up call. The other route, especially for professionals with a few years under their belt, is to follow the money by contacting whoever has the most likely access to investable capital.

We know that prospecting is essential. So how can an advisor – whether they are brand new to the business or trying to elevate a seasoned career – prospect more effectively in today’s marketplace? Just because the “tried-and-true” prospecting methods of yesteryear don’t work as well today, that doesn’t mean advisors should scrap everything and go all-in on the marketing flavor of the month. You might be surprised at the answer.

If you want to make your prospecting easier and more effective, and ultimately generate more clients for you, here are four steps to find the perfect prospects faster and more effectively:

Step #1 – Look in the mirror:
If you want to find your perfect prospect, the best way to get started is to look inward and figure out who you are and what’s important to you. How would people describe you? How do you like to spend your time? What values do you adhere to in your own life? What are your talents? What sets you apart from other advisors?

Once you’ve made this inward look, the next step is to look outward for prospects who might possess those same qualities. Where do they work? Where do they spend their free time? How can you connect with them?
People enjoy interacting with others who are just like them. Your prospects will see you as an ally who understands them and faces the same joys and struggles in life.

Step #2 – Look at your client list:
Your existing clients provide an excellent clue into who your perfect prospects are (even if you’re a new advisor with only a small handful of clients).

Look at your client list and identify your favorite clients – the ones you love to work with the most. This doesn’t necessarily mean that you’ll be looking for the ones with the most assets or the ones who generate most of your revenue. Instead, find the clients who you simply like to spend time and the ones who you really connect with; identify the ones who leave you feeling energized and valued as a professional.

Once you have a list of your favorite clients, determine what characteristics are common among all of them. Check for demographic characteristics, personality traits, aspirations, and values that are shared among a majority of your favorite clients.

Also look at what solutions you are providing for your client’s biggest problems. Does your experience with certain products or services make you an expert in working with those types of clients?

This step is critical because it starts to paint a picture of your favourite clients – the ones who give you a reason to get out of bed in the morning and face the day. Think about what you enjoy most about being an advisor and how your favourite clients make you feel.

Step #3 – Paint a picture:
Based on your findings in step 1 and step 2, describe what your perfect prospect profile is like:

  • What is important to them?
  • Who is important to them?
  • What values do they possess?
  • What motivates them?
  • How would you describe them demographically?
  • What personality traits do they possess?
  • Where do they spend their time and money?
  • Where do they typically work? Where do they typically spend their time when they are not working?
  • What events in life are they facing now or will they be facing in the near future?
  • What needs and challenges do they face that you can offer valuable insight into?

Craft an outline of what that person looks like and be able to describe that person if someone asks you who they can introduce you to.

Step #4 – Figure out where that prospect is and go to them:
Take a look at your perfect prospect profile and determine where they spend their time.
Review available prospecting methods against the picture you developed of your prospect profile. Do your prospects even see or hear your prospecting message and is it something that resonates with them? Are there specific prospecting methods you can adopt (and adapt, because it’s never one-size-fits-all) to reach deeper into that pool of prospects?

Bonus Step – Segment your client list:
As you add more clients to your business, you may want to revisit the level of service you provide to each client. By segmenting your client list into three simple groups – top tier, middle tier (who might possess some qualities you prefer and have the potential to become top tier clients), and bottom tier clients (who are definitely NOT your favourite clients!). Create service level agreements for each tier that ties into your marking plan and budget. Provide a richer, more valuable experience with more frequent connections to your top tier.

Some of the benefits of working with your top tier are:

  • Less stress as you are working with clients that you like
  • Stream-line your business as you work with similar clients
  • Focuses your marketing campaigns
  • You are seen as an expert
  • More revenue opportunities
  • Your time and effort is respected and valued

Finding perfect prospects ensures a stronger, enjoyable and a longer-lasting career as a financial advisor. Follow these four steps to find more perfect prospects.

Rosemary Smyth, MBA, CIM, FCSI, ACC, is an author, columnist and an international business coach for financial advisors. She spent her career working at leading investment firms before pursuing her passion for coaching. She lives in Victoria, BC. Visit her website at www.rosemarysmyth.com. You can email Rosemary at: rosemary@rosemarysmyth.com

Aaron Hoos, MBA, has worked in the financial industry since 1997. Formerly a stockbroker, insurance broker, and award-winning sales manager, today he writes for the financial and real estate industry as an educator and marketer. He is working on his second book. Visit his website at AaronHoos.com and follow him on Twitter @AaronHoos.

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Who are your ideal customers?

Your ideal customers are the ones who will suffer if they don’t buy what you are selling.

Your ideal customers are the ones who will lose money because they haven’t invested in your solution.

Your ideal customers are the ones whose lives will be worse because they haven’t met with you or agreed that your product or service can help them.

Your ideal customers are the ones who are held back because they haven’t gained access to your offering.

Your ideal customers are the ones who haven’t yet figured out that they have a problem… and their quality of life is lower because of it.

Your ideal customers are the ones who are struggling with what they currently do.

Your ideal customers are the ones who are suffering because their existing choices aren’t meeting their needs.

Your ideal customers are the ones who don’t just have wants and desires and dreams… but a real and substantial and costly problem.

Your ideal customers are the ones who have the most to lose.

The needier your potential customers are, and the costlier that need is in their lives, the better.

Find those people, show them the costs of their existing situation, then reveal the fastest, easiest, most painless, and the very best way to invest in a new solution — YOUR solution.

(PS, If you don’t believe your solution is the fastest, easiest, most painless, and the very best solution then improve your solution or find a new one or get out of the business).

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When lead generation turns into lead DE-generation

One of the tasks of a business is to fill its sales funnel with leads. The more leads (and the more targeted those leads are) the better. But not all of those leads will buy from you.

Although most businesses will have some leads fall out of their sales funnel, it pays to spend some time investigating the causes of lead degeneration.

To find out how much a lead is worth to your business, determine is what the average spend on each sale, then determine your prospect-to-customer (conversion) rate, then determine your lead-to-prospect (qualification) rate. So, if your average customer spends $100.00 per sale, and if you convert 1 customer out of every 10 prospects, and if you convert 1 prospect out of every 10 leads, then each lead is worth $1.00. ($100/10 prospects = $10; then $10/10 leads = $1).

In the scenario above, if you can plug the holes in the lead stage of your sales funnel and save even one lead, you’ve saved $1.00.

So how do you plug the holes in your lead stage? First, you need to identify why leads leave.
Although each business’ leads will have their own unique reasons for leaving, here are some general observations:

  • The lead discovers that your product or service doesn’t solve their problem in the way they initially thought it might when they were in the audience stage.
  • You don’t qualify the lead at the right time (either too fast or too slow).

Although there might be other reasons, many of the reasons I’ve encountered are subsets of these reasons for lead fall-out. Here are a few practical scenarios of how leads fall out of the lead stage:

  • The prospective buyer realizes they have a problem and they start to investigate the solution. They sign up for your email newsletter to get more information but as the information starts to come in, they realize that they don’t have the problem they once thought they did.
  • The prospective buyer is price shopping and although your product or service seems equivalent or provides even better value than a competitor’s product, the lead discovers the price and heads away from your business to the cheaper price.
  • The prospective buyer asks to find out more about your product or service and although they want information to make an informed decision, they instead get a sales pitch that tries to push them to a sale faster than they are ready.
  • As the prospective buyer moves through lead the stage, they start to uncover objections about your product or service. However, your sales process doesn’t address objections until the prospect stage.
  • The prospective buyer learns more about your product or service, and seems very interested, but they discover other solutions (including alternates and replacements that they had not considered previously), which seem superior at the time.

The lead stage can be quite tenuous – you don’t want to come across as too pushy but you also need to take charge and help the prospective buyer understand what you have to offer and what value it provides.

You can keep leads from falling out of the lead stage by doing some of the following:

  • Take a poll of your leads and of your prospects and compare the two. Are there responses present among your leads that simply do not appear among your prospects? Chances are, something in your sales funnel is driving those specific leads away (or outside of your sales funnel is attracting those specific leads away).
  • If you have captured some contact information from your leads, follow-up when it becomes apparent that they are no longer responsive leads. Ask them what they chose instead, and why.
  • Examine the marketing you do at the lead stage. Test new methods or new ways of communicating.
  • Time your leads through the lead stage. Test a slightly faster and slightly slower rate and see what happens.
  • Look at where you handle objections in your sales funnel and try spreading them out a little so that some objections are handled earlier in the funnel.
  • If your qualification (lead-to-prospect) rate suddenly drops off, scour the news to pinpoint a possible cause. Did a news story related to your industry suddenly sour your leads?

Lead generation is vital to ensuring that your business sells its products or services and generates cash flow. But if you don’t pay attention, lead generation can easily turn to lead degeneration.